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Last week, the U.S. Department of Education (ED) concluded the Reimagining and Improving Student Education (RISE) committee negotiated rulemaking (“neg reg”). During neg reg, ED convenes external higher education stakeholders to negotiate and hopefully reach consensus on proposed regulatory changes. This meeting was the second of two work periods for the RISE committee, which discussed federal student loan borrowing and repayment provisions included in the recently enacted budget reconciliation law, the One Big Beautiful Bill Act (H.R.1). Read our summary of the first work period here.
Consensus Vote and Next Steps
After almost four days of negotiations, the Department cancelled the final day of discussion and moved to a vote on the current state of the regulatory changes. Prior to the vote, Under Secretary Nicholas Kent reminded negotiators that failure to reach consensus would allow ED to reconsider or rescind compromises it made at the negotiating table to date. After considering the compromises offered by the Department and the remaining unresolved issues, all negotiators approved the current proposed regulatory language, except for the negotiator representing military veterans, who abstained. Because negotiators reached consensus, ED committed to including the agreed-upon language in its proposed rule.
The Department intends to post the proposed rule in early 2026 followed by a 30-day public comment period. Members of the public can submit written comments that support areas of compromise reached or suggest further changes to the proposed rule. The final rule is expected to take effect on July 1, 2026, unless otherwise dictated by H.R.1.
The topics laid out below were the primary areas of disagreement between negotiators and the Department during the second work period. Each section lays out the arguments made by negotiators, the Department’s position, and any remaining dispute after the consensus vote.
Repayment Assistance Plan (RAP) Changes: Payment Adjustments for Married Joint Filers and Advance IDR/PSLF Credit
Borrowers with loans disbursed on or after July 1, 2026, will have the option to enroll in the new Repayment Assistance Plan (RAP), which replaces existing income-driven repayment (IDR) plans for new borrowers (defined as those who take out any new loans on or after July 1, 2026). Under RAP, monthly payments are determined as a share of a borrower’s adjusted gross income (AGI), with higher-income borrowers contributing a larger percentage of their income.
During negotiations, the legal assistance negotiator raised concerns that a married couple who are both federal loan borrowers filing taxes jointly could face disproportionately high payments under RAP because their payment amount is determined using their joint income, creating a “marriage penalty.” In response, the Department accepted the negotiator’s proposed language to prorate RAP payments for these borrowers based on each spouse’s share of the total loan balance. Additionally, if a borrower’s adjusted payment amount is calculated to be less than $10, the minimum monthly payment will be set at $10.
Another issue raised by legal assistance negotiators was whether borrowers who make advance payments exceeding their required monthly amount would receive benefits such as principal matching, interest subsidies, or forgiveness credit. The Department agreed that advance payments will count toward IDR and PSLF, but borrowers will earn that credit incrementally each month rather than in advance.
However, ED declined to extend principal matching or interest subsidies to advance payments, determining instead that such payments will be applied directly to the principal balance. Instead, borrowers will have the ability to opt out of the advanced due date by contacting their loan servicer. The Department held that borrowers must make monthly payments on time to receive the interest subsidy and that economic hardship forbearance does not count toward PSLF. Additionally, ED will consider a borrower’s monthly payment as an on-time payment if it is received on or before the due date for the current month, but after the due date for the previous month.
Easing the Transition for Borrowers into Rehabilitation
The reconciliation law allows for borrowers to rehabilitate their Direct Loans, Federal Family Education Loans (FFEL), and Perkins Loans twice, rather than the current one-time allowance, effective, July 1, 2027. During negotiations, the legal assistance negotiators urged the Department to consider adding language that would allow an additional rehabilitation attempt for borrowers who “used up” a rehabilitation attempt to exit default when they could have otherwise used the Fresh Start program. (Fresh Start was a temporary program intended to ease borrowers’ path out of default as the pandemic payment pause ended). The Department rejected this proposal, explaining that Fresh Start was designed to address default, not rehabilitation, and held that it lacks the legal authority to authorize more than two rehabilitations.
The legal assistance negotiators also submitted several other proposals to ease the transition of borrowers into rehabilitation. They recommended eliminating administrative wage garnishment, arguing that simultaneous collection methods would undermine borrowers’ ability to make payments. The Department declined, stating that they don’t want to encourage borrowers to pursue rehabilitation simply to halt collections.
The legal assistance negotiators proposed setting the minimum rehabilitation payment equal to the borrower’s lowest possible monthly payment under the repayment plans for which they are eligible, rather than setting it at the income-based repayment (IBR) amount for all borrowers, a proposal ED also rejected. The Department partially adopted a proposal from the legal assistance negotiators allowing borrowers to opt into an IDR plan following successful rehabilitation.
Setting a Minimum Monthly Payment in the Tiered Standard Repayment Plan
The reconciliation law collapses the three currently available fixed repayment plans (standard, extended, and graduated) into one plan (tiered standard) for new borrowers. Borrowers who only have loans disbursed before July 1, 2026, will retain access to the existing standard, extended, and graduated plans. Borrowers with existing loans who take out new loans after July 1, 2026, will lose access to the old repayment plans and must repay their loans under one of the new plans. The new tiered standard plan requires fixed monthly payments over different repayment terms, with the length of repayment determined by the amount a borrower owes when entering repayment.
Negotiators representing legal assistance groups and taxpayers proposed to set the minimum monthly amount to $10 under the tiered standard plan to keep payments affordable. The Department set the minimum monthly payment to $50, an amount that was supported by the negotiators representing loan servicers and taxpayers. The loan servicer negotiators argued that setting this floor will help protect small-balance borrowers from excessive interest payments and unreasonably long repayment periods. Although the negotiator representing taxpayers originally pushed for the $10 minimum payment, they ultimately supported the $50 minimum, noting that having consistent monthly payments will generate savings for the government in the long run. The $50 minimum payment amount also aligns with current standard plan requirements and will create continuity for borrowers. However, this minimum payment may be unaffordable for some borrowers and is not required by statute.
Loan Limits for Professional Students
As part of its implementation of new student loan borrowing limits included in H.R.1, ED proposed new definitions of “graduate student” and “professional student.” H.R.1 eliminates the current Graduate PLUS program, which allows students to borrow up to the full cost of attendance and, as of July 1, 2026, limits graduate student borrowing to $20,500 annually and professional student borrowing to $50,000 annually. Lifetime borrowing will be capped at $100,000 for graduate students and $200,000 for professional students. Because professional programs will have access to more than twice the annual loan limits of graduate programs, defining “professional student” emerged as a central debate, particularly for the negotiators representing institutions.
ED’s initial proposal aligned with the current regulatory definition of “professional degree” under 34 CFR 668.2 by designating higher loan limits for students attending professional programs in ten fields of study: Pharmacy (Pharm.D.), Dentistry (D.D.S. or D.M.D.), Veterinary Medicine (D.V.M.), Chiropractic (D.C. or D.C.M.), Law (L.L.B. or J.D.), Medicine (M.D.), Optometry (O.D.), Osteopathic Medicine (D.O.), Podiatry (D.P.M., D.P., or Pod.D.), and Theology (M.Div., or M.H.L.).
In collaboration with negotiators representing institutions of higher education, the taxpayer negotiator proposed expanding the professional student definition to include all programs within the same two-digit Classification of Instructional Programs (CIP) code of any of the degrees listed in ED’s proposal, with the addition of clinical psychology programs (Psy.D.). Negotiators argued that using two-digit CIP codes to define “professional students” would allow students in professional programs with substantial similarities to those outlined in existing statute to access higher loan limits.
ED expressed concerns about expanding the list of professional programs beyond those explicitly listed by Congress and initially proposed using six-digit CIP codes to more narrowly define professional students. In response to concerns from negotiators representing public and private nonprofit institutions, the Department proposed compromise language that limits professional programs to those with the same four-digit CIP code as the ten programs listed in statute, plus clinical psychology Psy.D. and Ph.D. programs. Using four-digit CIP codes would broaden the types of professional programs eligible for higher loan limits beyond those listed explicitly in statute but still narrows eligible programs more significantly than under the two-digit CIP code proposal offered by the taxpayer negotiator.
Loan Limits for Parent PLUS Borrowers
Effective July 1, 2026, H.R.1 sets new annual, aggregate, and lifetime borrowing caps across the federal student loan portfolio, including, for the first time, the Parent PLUS program. The current program allows parents of dependent undergraduates to borrow up to the full cost of attendance each year. Effective July 1, 2026, the law imposes limits on the Parent PLUS program of $20,000 per year for each dependent student, with a lifetime limit of $65,000 per student. However, ED proposed exempting borrowers from this new limit if a parent borrower or student themselves received a Direct Loan for enrollment “in a program of study” as of June 30, 2026.
Negotiators representing taxpayers and state officials questioned whether “program of study” referred to the type of degree or credential (e.g., Bachelor of Arts, Master of Science) or the specific field of study or major (e.g., English, economics). Narrowing “program of study” to mean a student’s field of study would cause Parent PLUS borrowers to lose access to the higher loan limits if a student who was enrolled on or before June 30, 2026, changed their major.
In response to these concerns, ED proposed defining “program of study” as a “program that confers an associate or baccalaureate degree,” but received pushback from negotiators representing taxpayers and loan servicers, who felt this language was inconsistent with other uses of the phrase “program of study” in H.R.1. ED added language to clarify that students who change majors within the same degree or certificate program are considered enrolled in the same “program of study.”
The phrase “program of study” also appears in H.R.1’s provision allowing institutions to establish their own loan limits. To assuage concerns from negotiators about the different uses of “program of study” throughout the regulatory text, ED accepted a proposal from the student loan servicer negotiators that defined “program of study” as academic major when institutions set lower loan limits for particular programs. Narrowly defining “program of study” for the purposes of institutional loan limits will allow colleges to set limits based on specific majors rather than for entire credentials, while the broader interpretation applied for the PLUS loan limit exemption will protect borrowers with existing PLUS loans who change their majors from losing access to higher loan amounts.
Looking Ahead
ED will also convene a separate rulemaking panel, the Accountability in Higher Education and Access through Demand-driven Workforce Pell (AHEAD) committee, which will meet in December 2025 and January 2026. The AHEAD committee will discuss issues including institutional and programmatic accountability metrics and eligibility requirements for the new Workforce Pell program.
To view materials provided to the committee and the public, visit the Department of Education’s negotiated rulemaking website.
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